APU AmeriGas Partners LP

AmeriGas Propane, Inc., the general partner of AmeriGas Partners, L.P. (the "Partnership," NYSE: APU), today reported financial results for the fiscal quarter ended December 31, 2018.

HIGHLIGHTS

• GAAP net income of $44.5 million, compared with $104.4 million in the prior-year period; Adjusted net income of $122.2 million, compared with $103.7 million in the prior-year period
• Adjusted EBITDA of $210.7 million, compared with $194.1 million in the prior-year period
• Strongest first quarter since Fiscal 2014

Hugh J. Gallagher, president and chief executive officer of AmeriGas, said, "We are pleased to report our strongest first quarter in five years, with Adjusted EBITDA up 9% over the last year. Our teams did an excellent job of managing expenses despite the increased activity associated with colder weather, and we continue to see solid volume growth in our National Accounts and Cylinder Exchange programs. As the heating season continues, we remain focused on leveraging technology to drive operational excellence while providing great customer service when it is most needed."

KEY DRIVERS OF FIRST QUARTER RESULTS

• Degree days for the quarter were 5% colder than normal and 6% colder than last year
• Retail volumes sold increased by 5 million gallons over the prior year due to the colder weather
• Unit margins increased compared to the prior-year period reflecting, in part, declining wholesale propane prices later in the period
• Our National Accounts and Cylinder Exchange programs continued to show solid volume growth, with volumes up over 10% from last year

EARNINGS CALL and WEBCAST

AmeriGas Partners, L.P. will hold a live Internet Audio Webcast of its conference call to discuss first quarter earnings and other current activities at 9:00 AM ET on Wednesday, February 6, 2019. Interested parties may listen to the audio webcast both live and in replay on the Internet at http://investors.amerigas.com/investor-relations/events-presentations or at the company website http://www.amerigas.com under Investor Relations. A telephonic replay will be available from 2:00 PM ET on February 6th through 11:59 PM on February 13th. The replay may be accessed at (855) 859-2056, and internationally at 1-404-537-3406, conference ID 2974015.

ABOUT AMERIGAS

AmeriGas is the nation’s largest retail propane marketer, serving over 1.7 million customers in all 50 states from approximately 1,900 distribution locations. UGI Corporation, through subsidiaries, is the sole General Partner and owns 26% of the Partnership and the public owns the remaining 74%. Comprehensive information about AmeriGas is available on the Internet at http://www.amerigas.com

USE OF NON-GAAP MEASURES

The Partnership’s management uses certain non-GAAP financial measures, including adjusted total margin, EBITDA, Adjusted EBITDA and adjusted net income (loss) attributable to AmeriGas Partners, L.P., when evaluating the Partnership’s overall performance. These financial measures are not in accordance with, or an alternative to, GAAP and should be considered in addition to, and not as a substitute for, the comparable GAAP measures.

Management believes earnings before interest, income taxes, depreciation and amortization (“EBITDA”), as adjusted for the effects of gains and losses on commodity derivative instruments not associated with current-period transactions and other gains and losses that competitors do not necessarily have ("Adjusted EBITDA"), is a meaningful non-GAAP financial measure used by investors to (1) compare the Partnership’s operating performance with that of other companies within the propane industry and (2) assess the Partnership’s ability to meet loan covenants. The Partnership’s definition of Adjusted EBITDA may be different from those used by other companies. Management uses Adjusted EBITDA to compare year-over-year profitability of the business without regard to capital structure as well as to compare the relative performance of the Partnership to that of other master limited partnerships without regard to their financing methods, capital structure, income taxes, the effects of gains and losses on commodity derivative instruments not associated with current-period transactions or historical cost basis. In view of the omission of interest, income taxes, depreciation and amortization, gains and losses on commodity derivative instruments not associated with current-period transactions and other gains and losses that competitors do not necessarily have from Adjusted EBITDA, management also assesses the profitability of the business by comparing net income attributable to AmeriGas Partners, L.P. for the relevant periods. Management also uses Adjusted EBITDA to assess the Partnership’s profitability because its parent, UGI Corporation, uses the Partnership’s Adjusted EBITDA to assess the profitability of the Partnership, which is one of UGI Corporation’s industry segments. UGI Corporation discloses the Partnership’s Adjusted EBITDA as the profitability measure for its domestic propane segment.

Management believes the presentation of other non-GAAP financial measures, comprised of adjusted total margin and adjusted net income (loss) attributable to AmeriGas Partners, L.P., provide useful information to investors to more effectively evaluate the period-over-period results of operations of the Partnership. Management uses these non-GAAP financial measures because they eliminate the impact of (1) gains and losses on commodity derivative instruments that are not associated with current-period transactions and (2) other gains and losses that competitors do not necessarily have to provide insight into the comparison of period-over-period profitability to that of other master limited partnerships.

Reconciliations of adjusted total margin, EBITDA, Adjusted EBITDA and adjusted net income attributable to AmeriGas Partners, L.P. to the most directly comparable financial measure calculated and presented in accordance with GAAP are presented at the end of this press release.

USE OF FORWARD-LOOKING STATEMENTS

This press release contains certain forward-looking statements that management believes to be reasonable as of today’s date only. Actual results may differ significantly because of risks and uncertainties that are difficult to predict and many of which are beyond management’s control. You should read the Partnership’s Annual Report on Form 10-K for a more extensive list of factors that could affect results. Among them are adverse weather conditions, cost volatility and availability of propane, increased customer conservation measures, the capacity to transport propane to our market areas, the impact of pending and future legal proceedings, liability for uninsured claims and for claims in excess of insurance coverage, political, economic and regulatory conditions in the U.S. and abroad, the availability, timing and success of our acquisitions, commercial initiatives and investments to grow our business, our ability to successfully integrate acquisitions and achieve anticipated synergies, and the interruption, disruption, failure, malfunction or breach of our information technology systems, including due to cyber-attack. The Partnership undertakes no obligation to release revisions to its forward-looking statements to reflect events or circumstances occurring after today.

  REPORT OF EARNINGS AMERIGAS PARTNERS, L.P. AND SUBSIDIARIES (Thousands, except per unit and where otherwise indicated) (Unaudited)    

Three Months EndedDecember 31,

Twelve Months EndedDecember 31, 2018   2017 2018   2017 Revenues: Propane $ 742,900 $ 711,464 $ 2,577,230 $ 2,290,946 Other 77,313   75,832   278,665   272,679   820,213   787,296   2,855,895   2,563,625   Costs and expenses: Cost of sales — propane 435,415 344,351 1,306,680 1,021,207 Cost of sales — other 21,586 20,994 87,168 81,023 Operating and administrative expenses 235,138 230,339 927,863 918,670 Impairment of tradenames and trademarks — — 75,000 — Depreciation and amortization 45,709 47,424 184,038 193,318 Other operating income, net (5,719 ) (4,637 ) (25,455 ) (19,645 ) 732,129   638,471   2,555,294   2,194,573   Operating income 88,084 148,825 300,601 369,052 Loss on extinguishments of debt — — — (26,578 ) Interest expense (42,354 ) (40,577 ) (164,902 ) (160,775 ) Income before income taxes 45,730 108,248 135,699 181,699 Income tax expense (409 ) (2,378 ) (2,246 ) (3,575 ) Net income including noncontrolling interest 45,321 105,870 133,453 178,124 Deduct net income attributable to noncontrolling interest (835 ) (1,449 ) (2,866 ) (3,598 ) Net income attributable to AmeriGas Partners, L.P. $ 44,486   $ 104,421   $ 130,587   $ 174,526   General partner’s interest in net income attributable to AmeriGas Partners, L.P. $ 11,776   $ 12,372     $ 46,629   $ 46,166   Limited partners’ interest in net income attributable to AmeriGas Partners, L.P. $ 32,710   $ 92,049     $ 83,958   $ 128,360   Income per limited partner unit (a) Basic $ 0.35   $ 0.97   $ 0.90   $ 1.37   Diluted $ 0.35   $ 0.97   $ 0.90   $ 1.37   Weighted average limited partner units outstanding: Basic 93,055   93,016   93,028   93,006   Diluted 93,118   93,080   93,081   93,060   SUPPLEMENTAL INFORMATION: Retail gallons sold (millions) 310.3 305.0 1,086.6 1,046.2 Wholesale gallons sold (millions) 21.9 17.0 67.2 52.5 Total margin (b) $ 363,212 $ 421,951 $ 1,462,047 $ 1,461,395 Adjusted total margin (c) $ 441,714 $ 421,200 $ 1,528,827 $ 1,455,313 EBITDA (c) $ 132,958 $ 194,800 $ 481,773 $ 532,194 Adjusted EBITDA (c) $ 210,667 $ 194,057 $ 622,120 $ 560,221 Adjusted net income attributable to AmeriGas Partners, L.P. (c) $ 122,195 $ 103,678 $ 270,934 $ 202,553 Expenditures for property, plant and equipment: Maintenance capital expenditures $ 16,198 $ 10,105 $ 59,029 $ 46,760 Growth capital expenditures $ 14,814 $ 13,480 $ 49,659 $ 48,608 (a)   Income per limited partner unit is computed in accordance with accounting guidance regarding the application of the two-class method for determining earnings per share as it relates to master limited partnerships. Refer to Note 2 to the consolidated financial statements included in the AmeriGas Partners, L.P. Annual Report on Form 10-K for the fiscal year ended September 30, 2018. (b) Total margin represents "Total revenues" less "Cost of sales — propane" and "Cost of sales — other." (c) The Partnership’s management uses certain non-GAAP financial measures, including adjusted total margin, EBITDA, Adjusted EBITDA, and adjusted net income attributable to AmeriGas Partners, L.P.     GAAP / NON-GAAP RECONCILIATION (Thousands) (Unaudited)     Three Months EndedDecember 31, Twelve Months EndedDecember 31, 2018   2017 2018   2017 Adjusted total margin: Total revenues $ 820,213 $ 787,296 $ 2,855,895 $ 2,563,625 Cost of sales — propane (435,415 ) (344,351 ) (1,306,680 ) (1,021,207 ) Cost of sales — other (21,586 ) (20,994 ) (87,168 ) (81,023 ) Total margin 363,212 421,951 1,462,047 1,461,395 Add net losses (subtract net gains) on commodity derivative instruments not associated with current-period transactions 78,502   (751 ) 66,780   (6,082 ) Adjusted total margin $ 441,714   $ 421,200   $ 1,528,827   $ 1,455,313     Adjusted net income attributable to AmeriGas Partners, L.P.: Net income attributable to AmeriGas Partners, L.P. $ 44,486 $ 104,421 $ 130,587 $ 174,526 Add net losses (subtract net gains) on commodity derivative instruments not associated with current-period transactions 78,502 (751 ) 66,780 (6,082 ) Impairment of Heritage tradenames and trademarks — — 75,000 — Loss on extinguishments of debt — — — 26,578 MGP environmental accrual — — — 7,545 Noncontrolling interest in net (losses) gains on commodity derivative instruments not associated with current-period transactions, impairment of Heritage tradenames and trademarks and MGP environmental accrual (793 ) 8   (1,433 ) (14 ) Adjusted net income attributable to AmeriGas Partners, L.P. $ 122,195   $ 103,678   $ 270,934   $ 202,553     EBITDA and Adjusted EBITDA: Net income attributable to AmeriGas Partners, L.P. $ 44,486 $ 104,421 $ 130,587 $ 174,526 Income tax expense 409 2,378 2,246 3,575 Interest expense 42,354 40,577 164,902 160,775 Depreciation and amortization 45,709   47,424   184,038   193,318   EBITDA 132,958 194,800 481,773 532,194 Add net losses (subtract net gains) on commodity derivative instruments not associated with current-period transactions 78,502 (751 ) 66,780 (6,082 ) Impairment of Heritage tradenames and trademarks — — 75,000 — Loss on extinguishments of debt — — — 26,578 MGP environmental accrual — — — 7,545 Noncontrolling interest in net (losses) gains on commodity derivative instruments not associated with current-period transactions, impairment of Heritage tradenames and trademarks and MGP environmental accrual (793 ) 8   (1,433 ) (14 ) Adjusted EBITDA $ 210,667   $ 194,057   $ 622,120   $ 560,221    

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INVESTOR RELATIONS610-337-1000Brendan Heck, ext. 6608Shelly Oates, ext. 3202